A look at ins and outs of health care reform

Monday

Jun 24, 2013 at 12:01 AM

Some call the Affordable Care Act (ACA) a huge over-reach by the federal government, and a few even use the "S word" -- socialism. Others say it a gallant attempt to cover most U.S. citizens and others in our country legally.

Regardless of which view you embrace, the ACA is the law of the land and its major provisions will be upon us in 2014.

Equally important for you to know, ACA's Health Insurance Marketplace, sometimes called "Exchange," will be open for enrollment on Oct. 1. It is a new way for individuals and business owners to select health insurance policies from an array of participating private companies.

The Marketplace also will qualify eligible applicants for Medicaid and subsidy tax credits and will describe the penalties businesses and individuals will pay if they opt out of buying mandated health insurance.

States have a choice of running their own Marketplace, seeking federal help for certain tasks or letting the federal government do it for them.

"In December 2012, Gov. Rick Scott announced that Florida would not be pursuing efforts to implement a state-based health insurance exchange," according to The Henry J. Kaiser Family Foundation, a nonprofit that tracks health care in all 50 states. "Gov. Scott has been a vocal opponent of federal health reform, and the state has refused multiple funding opportunities available through the Affordable Care Act."

As Scott's re-election campaign casts a wider net, he has softened his objections to ACA, to the dismay of Florida's more conservative legislators. Even so, the Kaiser Family Foundation says, "The federal government will assume full responsibility for running a health insurance exchange in Florida beginning in 2014."

You can read the Florida report at tinyurl.com/l3entt9.

It was initially anticipated that the Marketplace would start on Jan. 1, 2014. But that is unlikely to occur, and the Centers for Medicare & Medicaid Services (CMS), a division of Health and Human Services, is now saying it will begin in 2014.

CMS advises you to enroll after Oct. 1 and keep your current insurance policy until the Marketplace-purchased insurance goes into effect.

Businesses with under 100 employees may purchase insurance for their workers through the Small Business Health Options Program (SHOP). It is a part of the Marketplace designed to help small businesses wade through an assortment of options, tax credits, subsidies and penalties.

A company with 50 full-time employees or more must purchase insurance for its employees or pay penalties. If the company chooses not to insure its employees in 2014, the penalty is $2,000, multiplied by the number of full-time employees, minus 30. That means a company with 50 employees would pay $40,000 annually, unless it qualifies for an exemption.

In some situations, it could become less expensive for a company to pay the penalty and tell its employees they are on their own. Keep in mind, however, that most individuals are also mandated to purchase insurance and the company's morale could suffer if its employees are left to fend for themselves.

For individuals "that decide not to buy health insurance, the penalty will be 1 percent of your income in 2014, and 2 percent in 2015," says Bill Steffen, a former Bradenton resident who sells health insurance in Florida and Arizona. For low- and moderate-income people who could not afford health insurance before, subsidies will be available to help them.

In a notice of rulemaking, Steven T. Miller, deputy commissioner for services and enforcement for the Internal Revenue Service, writes that subsidies in the form of tax credits will be "generally available to individuals and families with incomes between 100 percent and 400 percent of the Federal Poverty Level."

As an example, Miller says, a family of four with income between $23,550 and $94,200 may be eligible for tax credits on a sliding income scale.

"The Congressional Budget Office estimates that when the Affordable Care Act is fully phased in, the premium tax credit will help 20 million Americans afford health insurance," Miller says.

He does not say how much it will cost taxpayers.

You can learn more about tax credits and penalties for individuals and businesses at IRS's portal, irs.gov/uac/Affordable-Care-Act-Tax-Provisions.

Also check out the U.S. Small Business Administration's site, sba.gov/healthcare.

Jerry Chautin is a volunteer with Manasota.SCORE.org, a local nonprofit SBA resource partner offering free business advice and mentoring. He is SBA's 2006 national "Journalist of the Year" and a former entrepreneur, commercial mortgage banker and business lender. He writes and blogs about business and commercial real estate strategies for several publications and financial organizations nationwide. Contact him with your questions and stories at jkchautin@aol.com and follow him on Twitter, www.twitter.com/JerryChautin.

In Monday’s Business Weekly section, the Let’s Talk Business column should have said that the Marketplace will qualify eligible applicants for Medicaid.